VW manager told CEO about U.S. "cheating" in July 2015: Report

VW declined to comment on the report. Winterkorn's lawyer was not immediately available for comment.

FRANKFURT/HAMBURG: A former senior quality manager at Volkswagen has told investigators he informed then-CEO Martin Winterkorn on July 27, 2015, that the carmaker had "cheated" during emissions tests in the United States, German media reported on Friday.

Volkswagen (VW) has said its executive board did not learn about the severity of emissions test cheating using illegal software until late August 2015.

VW has acknowledged it installed software that deactivated pollution controls on more than 11 million diesel vehicles sold worldwide, damaging its global business, leading to billions of dollars in fines, and prompting the departure of Winterkorn.

But questions linger over who knew the software was illegal, and when they found out. The timing is important because VW is being sued by investors for holding back market sensitive information - an allegation it denies.

According to a report by German daily Sueddeutsche Zeitung and broadcasters NDR and WDR published on Friday, the unidentified quality manager told German and U.S. investigators that Winterkorn phoned him on July 27 to enquire about problems with the certification of new models in the United States.

He says he then told the CEO that VW had "cheated" in the United States, the report said.

VW declined to comment on the report. Winterkorn's lawyer was not immediately available for comment.

Winterkorn in January declined to tell German lawmakers when he first learned about systematic exhaust emissions cheating but said it was no earlier than VW had officially disclosed.

In a settlement with U.S. authorities, VW said a meeting with senior managers took place in late July after U.S. regulators threatened not to certify VW model year 2016 vehicles for sale.

"VW AG supervisors requested a briefing on the situation in the United States. On or about July 27, 2015, VW AG employees presented to VW AG supervisors," the plea agreement, which VW filed with the U.S. District court, Eastern District of Michigan, said.

But VW has said managers' assessment at the time was that its violation of U.S. environmental rules could be resolved amicably, and potential penalties would not be dissimilar to those received by rival manufacturers, and therefore manageable.

The Notice of Violation issued by the U.S. Environmental Protection Agency on Sept. 18, 2015, which brought the scandal into the open, came as a "surprise" to VW and "presented the situation in a completely different light," the company said in an annual report.

Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.